Allianz Global Investors GmbH & Others v G4S PLC

Costs are discretionary under Civil Procedure Rules 1998, r 44.2. Although costs generally follow the successful party, the court may make a different order after considering all the circumstances, including success on a substantial issue and the state of the parties’ pleadings.

The successful party is identified by asking who, in substance and reality, won. A party may be the overall winner despite losing an important issue. That issue-specific loss may nevertheless justify a proportionate departure from the general rule. Any payment on account must reflect the likely recovery on detailed assessment and the court’s necessarily broad assessment of the costs claimed.

The judgment concerned costs following an earlier decision on the defendant’s strike-out and summary judgment application. The claimants’ claims were allowed to proceed, but the defendant succeeded on the legal definition of a PDMR under Financial Services and Markets Act 2000, s 90A and Schedule 10A, while the claimants succeeded in showing a real prospect of establishing that the relevant individuals were PDMRs.

The earlier judgment also identified ambiguity and insufficient clarity in parts of the pleadings. The issue was how those mixed results should affect costs under CPR 44.2 and what payment on account should be ordered.

1. Outcome. The claimants were the successful party as a matter of substance and reality because the application to strike out or dismiss most of the claims was dismissed and the claims could continue.
2. Under CPR 44.2, the general rule is that the unsuccessful party pays the successful party’s costs, but the court may make a different order after considering all the circumstances. The fact that the successful party lost on some issues does not by itself justify departing from the general rule.
3. The defendant’s success on the definition of PDMR justified a departure. That issue was a major part of the hearing and submissions, would materially affect the future conduct of the litigation, and had improved the prospects of settlement. The claimants had also advanced pleadings which were insufficiently clear and required clarification.
4. The order nevertheless had to reflect that the claimants remained the overall winners. The defendant was therefore ordered to pay 50 per cent of the claimants’ costs of the application, to be assessed if not agreed.
5. A payment on account should reflect the likely amount recoverable on detailed assessment. Given concerns about excessive time, unrelated work, consequential matters and hourly rates, the defendant was ordered to pay £97,000 on account, representing 25 per cent of the costs claimed.